Potential Extension of Non-Enforcement Policy for PTE 2020-02

It appears that the Acting Head of the Employee Benefits Security Administration, Ali Khawar, suggested at the annual meeting of the American Society of Pension Professionals & Actuaries that the temporary enforcement policy surrounding PTE 2020-02 may be extended.

PTE 2020-02 provides relief for rollover recommendations that result in prohibited transactions, so long as the exemption conditions are satisfied. In addition to the other conditions, financial institutions must document and disclose in writing the specific reasons that a rollover recommendation is in the retirement investor’s best interest.

According to a source in attendance, Acting Head Khawar intimated that an announcement would be made in the very near future.

Investment advisers should plan to adopt and implement their policies and procedures by the current December 20, 2021 deadline, but an extension would be welcomed as investment advisers finalize their processes.

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